Making a difference in communities through charity
March 08, 2023
With the economic turmoil and uncertainty of the last few years — which has affected people’s finances to a severe extent in many cases — and with some of the devastating events of 2022, there remains a huge need for charitable giving from those who are able.
The world in general has been deeply affected by the continued fallout of the pandemic and the lingering doubts and stresses of inflation. We’re strong advocates of making a difference in communities, and we encourage charitable giving whenever possible. But do you and your clients or plan participants realize there are multiple ways to give aside from writing a check?
Which causes are people donating to?
There’s the old saying about how, no matter what an individual’s circumstances, there’s always someone else who is going through something worse. In any economic situation, especially in our recent uncertain times, other people and organizations are almost always in need of assistance.
Homeless shelters, churches, food pantries and other organizations that lend a helping hand to those in need have always been top of mind for charitable individuals. When you factor in such unique crises as the war in Ukraine or Hurricane Ian from 2022, there’s no shortage in the need for relief and recovery throughout the world.
What financial assets can be given as a charitable donation other than cash?
If you have clients or employees who are able to give to charity at this time, you can help them set it up right from their retirement plans or other compensation.
We all know that cash can be given directly to bell ringers while exiting the grocery store during the holiday season or via payroll deductions to a specific charitable organization an employer has partnered with, but there are other — perhaps easier — ways individuals can give back.
If so inclined, people can donate financial assets, such as stocks and bonds, in addition to or instead of cash. This actually has a unique benefit, since donating financial assets may reduce the capital gains tax burden, which can thus increase the charitable gift.1 So, which financial assets are easiest to donate?
Giving shares to a charity of someone’s choice, as long as the charity accepts such donations, is fairly straightforward. Advisors or plan sponsors can help individuals arrange for shares they may already have to be sent to the charity once the charity’s account information is obtained for a smooth transaction.
Donating bonds to charity is a little more complicated than donating stocks, since you’ll have to navigate through different rules for different bonds, but it’s still relatively free of hassle. The easiest way is simply cashing it out and donating that amount to the charity. Otherwise, bonds can be purchased as gifts toward the charity or they can be donated as part of a will.
Record keeping for tax deductions
Since donations can be deducted on taxes, it’s important for business owners and individuals alike to keep records of any donations they make, cash or otherwise, if they intend to claim those deductions.
Such important record-keeping documentation includes:2
- Written acknowledgement of vehicle donations
- Bank records or a written communication for cash donations
- IRS Form 8283 for non-cash donations
Helping clients or employees with charitable giving
Do your clients or employees know they have the option to give stocks or bonds to charities? Check in with them and help them take a look at their accounts and see where it may be feasible, if they’re interested.
We would also like to take this opportunity to mention the CUNA Mutual Group Foundation. For over 50 years, the CUNA Mutual Group Foundation has invested in the communities we serve — to the tune of over $43 million so far.
The foundation is a registered 501(c)(3) organization and is committed to social justice and supporting our communities. Are you interested in a grant or sponsorship? Please visit the CUNA Mutual Group Foundation page to learn how to apply and for updates as 2023 continues.
1The Balance, How to Donate Stock and Other Financial Gifts, October 13, 2022
2USA.gov, Donating to Charity, July 11, 2022